DEFINITION of 'Double Gold ETF'

An exchange traded fund that tracks the value of gold and responds to movements in the same manner as an otherwise similar double leveraged ETF. A double gold ETF is one in which the spot value of gold or a basket of gold companies acts as the underlying for the fund. The ETF attempts to deliver price movements equal to double the movements of the underlying gold value.

BREAKING DOWN 'Double Gold ETF'

It is important to note that even though there is a potential for huge profits with this strategy, the risk that can be incurred could also be significant, in that the price could fall and losses could be huge. Double gold ETFs are by no means a unique fund product. There are numerous leveraged ETFs that aim to deliver movements equal to two or more times the movements of their underlyings. Some examples include leveraged ETFs on natural gas and crude oil. These ETFs can also aim to mimic an inverse movement relative to the underlying; such ETFs are known as inverse or bear ETFs.

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